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Germany Trade & Invest

Europe accounts for approximately 30% of the world photovoltaic solar market of which Germany is currently the largest in the region. This is according to a report compiled by Germany Trade and Invest.

“Battery-parity” on the horizon

The report, Batteries for Stationary Energy Storage in Germany: Market Status and Outlook, suggests that “battery-parity” in on the horizon.

With photovoltaic electricity costs being well below end-consumer electricity retail prices, the self-generation and consumption of photovoltaic energy is a natural market driver for storage. With escalating electricity prices and decreasing photovoltaic system costs, the business case for storage is becoming even stronger.

Market breakthrough

The gap between current battery system prices and target prices for “battery parity” is closing fast and the report suggests a “sudden market breakthrough” in the near future.

The demand breakthrough for the residential segment is expected in 2018:

More than 43 GWp of unsubsidized solar will be installed by 2020.

Self-generation and consumption without batteries will be about 30% of the annual consumption

Double own-consumption, with a 2KWh battery system, will reach 60%

In Germany, there are a number of market-pull incentives supporting investments into storage facilities. Target groups include municipalities, utilities, Public-Private partnerships, private consumers and the commercial sector. For instance, private consumers will receive investment grants of up to 30% and low interest loans for photovoltaic-connected storage with grid connection and data management systems. € 25 million has been set aside for grants in 2014. Companies in Germany are also encouraged to employ energy storage systems and can apply for loans of between € 25-100 million.

In addition to this, electricity storage facilities are exempt from grid tariffs, EEG levies and in the case of pumped hydro, also electricity taxes.

Incentive program

The German photovoltaic battery incentive program, KfW275, was introduced in May 2013 with €25 million in funding per year:

Two incentives are on offer-

The OpEx incentive:

The KfW program offers interest-reduced loans

This is applicable to photovoltaic systems up to 30 kWp

Applicable for batteries providing a minimum of seven years present value guarantee

The Battery management system must have open interface for external control

The maximum photovoltaic output at grid-connection point must be reduced by 40%

-The conditions are as follows:

Up to 100% of net investment

5/10/20 year loan with 1/2/3 years of free redemption

Fixed interest rates

Application through client’s house bank

The CapEx Incentive:

This is a cash incentive on purchase price which is to be cleared with the KfW program. This will lead to a loan reduction

Feed-in-tariff cuts were always preceded by strong peaks in demand. The German photovoltaic boom 2.0 is to peak in 2016 and this will be driven by a 52GWp cap

The German photovoltaic battery market-short-term, mid-term and long-term outlook

Short-term, photovoltaic batteries could reach an annual installation volume of over 100,000 systems by 2018. Retrofit installations will be a major driver.

Mid –term, 14% or 76TWh out of 542 TWh total German electricity demand could be met by self-produced photovoltaic power. This equals about 80-100 GWp of installed photovoltaic capacity).

Around 3.8 TWh of PV electricity could be economically stored in GER by 2020; this would allow an installed battery capacity of more than 12 GWh.

Long term, the current building structure in Germany would allow around 200GWp of installed capacity on photovoltaic suitable rooftops and facades. The photovoltaic plant retrofit market offers a battery market potential in the Giga-watt range. More than 1 million photovoltaic systems could be retrofitted by 2033.